Why Rain is proposing a merger with Telkom

[Hanno Labuschagne]

Why Rain is proposing a merger with Telkom

Leading entrepreneur Paul Harris (72), one of the triumvirate who created SA’s leading financial services group FirstRand through 1998’s merger of their much smaller RMB with First National Bank, is aiming for a repeat in the telecoms space.

Harris’s six year old company Rain formally proposed a merger with Telkom, SA’s formerly state-owned telecoms monopoly.

[Biznews]

 

[Thor]

So Telkom lied to shareholders?

 

[Johnatan56]

Telkom’s market cap is R23bn. With rain’s R1bn ebitda it is likely to be valued at not much more than half that figure. So would this not be more of a takeover by Telkom than a merger? Or have I got the numbers wrong?


“We will not address relative values until we prove the business case. Bear in mind that rain has just achieved critical mass so future growth will be at better margins. We are at different points of the value curve — 5G will accelerate growth and at rain we are positioned for it.”

Erm, no? Telkom can also adopt 5G, not an issue, and Telkom has already built up a huge client base.

Not sure why Rain thinks 5G wouldn't work everywhere/why that makes a difference? Or is this because T-Mobile & Sprint merger comparison? T-Mobile and Sprint had about the same market share, ~15% each, that's quite different.

 

[Pak Fa Fui]

Can someone in the know tell me if Telkom and Rain own their own networks

 

[swim]

So Telkom lied to shareholders?

Pump and dump

 

[SauRoNZA]

Can someone in the know tell me if Telkom and Rain own their own networks

Yes both operate their entire hardware platform end to end, with some outsourcing of specific software services in the middle.

 

[Pak Fa Fui]

Yes both operate their entire hardware platform end to end, with some outsourcing of specific software services in the middle.

Is operate and own the same thing.
Its only MTN and Vodacom that invests in their network, never cell c or Telkom or Rain

 

[SauRoNZA]

Is operate and own the same thing.
Its only MTN and Vodacom that invests in their network, never cell c or Telkom or Rain

They do have roaming agreements in some areas (they all do) but Telkom and Rain definitely own their own networks as well.

Even CellC used to but then sold it off to one of the others and is now just a virtual operator.

 

[jbroo]

While Rain is perceived to be nimble, sassy and cutting edge

By who? Not their customers.